Khujand International Airport Emergency Loan

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Translated version of this PSD: Russian The EBRD is considering a senior loan to the airport in the City of Khujand, “Khujand International Airport”, to finance emergency runway rehabilitation, the installation of high intensity lights and the modernisation of radio and ground control safety equipment. The safety of circa 600 thousand PAX that land and take-off from KHIA on an annual basis is will be improved by this project. This should have a demonstration effect encouraging other state companies in Tajikistan to adopt similar international safety standards, in addition to lowering their dependency on the state budget. The Project will also include development of an Airport Master Plan by the Airport, with the help of consultants expected to be funded from the Bank’s technical co-operation funds. This will also include a commercialisation plan to improve the efficiency and commercial orientation of the Airport’s operations, a route for the Airport to become ICAO compliant, a strategy for quality management in compliance with ISO standards, and assistance in fulfilling the requirements under environmental and social action plan. Khujand International Airport, located in the northwest of Tajikistan, is 100 per cent owned by the Government of Tajikistan, (represented by the State Committee on Investment and State Property Management). The Airport is considered to be the link in air services between northern and southern Tajikistan and has a strategic value in terms of economic growth and regional integration. A senior loan of up to USD 3.0 million (EUR 2.4 million equivalent) to the Khujand International Airport. Project costs are expected to be USD 7.2 million (EUR 5.7 million equivalent). The Project has been categorized B in accordance with the Bank’s 2008 Environmental and Social Policy. Potential environmental and social (E&S) impacts of the airport rehabilitation works which include emergency runway rehabilitation, the installation of high intensity lights and the modernisation of radio and ground control safety equipment are site-specific, readily identified and addressed through adequate mitigation measures. In accordance with the EBRD’s requirements for B-category projects, independent consultants carried out Environmental and Social Due Diligence (ESDD) consisting of a review of the Company's E&S management systems, assessment of the E&S performance of the existing operations and an E&S Analysis of the proposed project. The ESDD has not identified any significant non-compliance with the ICAO requirements. The Company does not have an environmental, health and safety management system but an ISO certification and QMS department has been established to prepare for ISO 14001 and OHSAS 18001certification. The Project will result in enhanced operational efficiency and substantial improvements in safety standards. A TC-funded consultant is expected to work directly with the Airport to bring it into full compliance with international safety and operational standards. The Consultant will also develop a route for the Airport to be ranked by ICAO. The ESDD concluded that the construction works will cause some temporary and localised impacts, including traffic safety issues along the construction material transport route, noise, air emissions (especially dust) and construction waste. The construction works will be managed in accordance with the local environmental legislation and good construction practices, and therefore, these impacts are expected to be efficiently mitigated. In order to minimise the impacts, local residents will be informed about any changes to traffic routes and expected traffic intensity and the schedule for construction. The main potential impact during operation will be the increase in noise due to an expected increase in the number of flights. An 8 per cent increase per year is projected, from 15-22 to 16-24 flights per day, however the actual increase might well differ from the projection, and similarly would the level of impact. Noise impacts and grievances, should there be any, will be monitored during project implementation and if significant impacts are identified, further mitigation and compensation measures will be considered as appropriate. An Environmental and Social Action Plan (ESAP) has been developed to mitigate the identified E&S issues and impacts during preparation, construction and operation of the project, and to bring the Company's operations into compliance with the EBRD's PRs. The main actions in the ESAP are related to EHS management systems; incorporation of E&S impact mitigation measures in the construction contractors agreements; hazardous material handling; improvement for working conditions; controlling risk of kerosene spills; waste management; stakeholder engagement; monitoring and permit issues. The Company will provide the Bank with annual environmental and social reports, including updates on the implementation of the ESAP. The Bank will commission a completion audit and may also conduct monitoring visits, as required. The Project is expected to include technical assistance for the development of a master plan for the Airport as well as improvements to management accounts and adoption of IFRS. The main objectives of the master plan are expected to cover: 1. A long term master plan for the Airport; 2. Commercialisation strategy for non-aeronautical revenues; 3. Achievement of ICAO compliance; 4. IFRS accounting action plan; 5. Quality management and ISO compliance; 6. Assistance with ESAP compliance. Two additional technical co-operation programmes will also be included: (1) to assist the company with procurement, and (2) for a lender’s monitor to help with the implementation of the project.